I’m Suddenly a Lot More Skeptical of the Feds’ New Fair Housing Rules

HUD’s specific, inclusive new definition of fair housing has the potential to increase integration and opportunity. But it offers significant challenges to those in the business of fair housing, and fears that it could empty out or gentrify neighborhoods that are most in need of help.

An abandoned Comcast building in Oak Park—an early building by the architect Albert Kahn—in the midst of its transformation into the affordable-housing Grove ApartmentsPhoto: Alex Garcia/Chicago Tribune

When Julian Castro, head of the Department of Housing and Urban Development, announced new rules about fair housing that transformed and expanded the feds’ old, vague criteria, many (myself included) thought that the implications could be immense. Revolving around an open data portal, they reflect decades of research about what the “fair” in “fair housing” entails—access to jobs, transit, and good schools included.

And not everyone who thought the rules could be transformative thought that would be a good thing. As one Detroit columnist put it, “More likely, the rule will make every neighborhood look like Detroit.”

Don’t rush to put your house on the market. After the initial excitement, there was a backlash of informed skepticism. The HUD rules aren’t a guarantee HUD will enforce those rules with vigor, or at all. And furthermore, the rules could create significant challenges for poor neighborhoods and the organizations that work to develop them.

The first part is obvious: HUD hasn’t said anything about enforcement, and historically, HUD hasn’t been particularly eager to enforce fair-housing rules.

“The HUD ruling has not defined penalties; it’s not like HUD has cut off funding for projects done by [community development corporations],” Yonah Freemark, project manager at the Metropolitan Policy Council, told me. “Frankly, the likelihood that they’ll do that is relatively small. The last time HUD really tried to enforce integration was 1969, when George Romney was secretary of HUD. He believed very strongly in integration; he led this integration campaign in the suburbs of Detroit. It was just a fiasco; a complete fiasco. He tried to cut off CDBG—community development block grants—money. And it didn’t work. Nixon totally pulled out of the idea of talking about integration in neighborhoods. And at that point we entered into the modern-day housing movement, which, frankly, has been no affordable housing in wealthier neighborhoods.”

According to Rob Breymaier, executive director of the Oak Park Regional Housing Center, HUD is still in the process of explaining the rules to communities, so they haven’t laid out how the rules might be enforced. “They wouldn’t not enforce them, but they’re not focusing on it,” Breymaier says. “It still doesn’t have the teeth; enforcement’s still up to agencies and lawyers. The new rules are way better for advocates.”

And then there’s the 2016 election. If there’s indeed a taste for and momentum towards enforcement, it would have to continue over into the next administration.

“So while the AFFH [affirmative fair housing] rule is significant, its ‘monumental’ nature was blown out of proportion in my opinion,” UIC DePaul professor John Joe Schlichtman told me in an email. “That said, the public will have a new ability to scrutinize the fairness of housing and local communities will now have to respond to the data. It is a gentle but significant change in direction—perhaps as much of a shift as was politically feasible right now.”

But the new rules will not just challenge communities; they’ll challenge advocates as well. One takeaway, for both fans and foes of the new rules, has been that they could open up opportunities for residents of poor urban neighborhoods to resettle in more affluent communities, especially suburban communities, as access to jobs and quality schools are prioritized by HUD.

It’s already happening in the Chicago area, as the Regional Housing Initiative has allowed smaller community housing authorities to pool resources with larger housing authorities like Chicago, leading to the construction of affordable housing in places like Glenview. In many ways, this is a good thing; the HUD rules follow from a sea change in research and perception of housing as a good in and of itself to a more holistic approach that considers the criteria made explicit by HUD’s new rules.

In particular, it goes back to changes made possible by the famous Gautreaux decision, which opened up housing vouchers for former Chicago public housing residents to move to 115 Chicago suburbs. The results were impressive, and residential mobility has been central to debates over housing and desegregation since.

In short, Gautreaux ended with people from bad neighborhoods moving to good neighborhoods, and they did better. That was good for the people who moved—but not necessarily for the neighborhoods they moved out of. In Chicago, those neighborhoods continue to decline in population.

To put it simply, HUD is Housing and Urban Development. The department is associated with housing, and housing is where the funds are. If HUD rules favor the construction of fair housing in more affluent neighborhoods with good schools and lots of jobs, what are communities without good schools and lots of jobs to do?

“We don’t do much to directly support businesses in poor communities, but we do have this legacy of supporting affordable housing in poor communities,” Freemark says. “There is funding for the New Market Tax Credit, which is similar to the low income housing credit, which provides funding for retail and things like that in poor communities. But the scale of funding for that program is much smaller than the affordable housing investments. Housing is where the majority of money is for that kind of investment. CDCs [community development corporations] could probably do a few more retail developments. But the scale of those investments is going to be much smaller.”

Freemark points to the Shops and Lofts development on 47th Street and Cottage Grove as a model of what CDCs could pursue. But it’s also a model of how difficult such a project is. In October 2010, Curbed Chicago reported that the development, “in the planning stage for at least three years,” was going to break ground in the spring of 2011. In the spring of 2011, they reported that it would break ground in the fall of 2011. It broke ground two years ago and was finally completed late last year. “That project required pulling together, like, ten different financing sources. And that’s crazy! That project took forever to complete, and it was nearly impossible because there was so little money,” Freemark says.

“The CDCs in these concentrated areas of poverty are going to have to adapt,” Breymaier says, “to focus not only on housing, but economic development, provision of services.” Another option, Breymaier says, is that a community development corporation with a focus on, say, Latinos in Little Village, Pilsen, and Berwyn, could continue to serve its traditional clientele but expand its geographic focus to Hyde Park, Schaumburg, or any community that makes sense. But it would be a big transformation for any such CDC, and for the concept of the CDC itself, which was originally intended to create community development in place, and particularly in poor communities.

“I think that we, as a society, need to find ways to make poor neighborhoods work more effectively, but there’s always going to be this push and pull,” Freemark says. “Either you have no investment and people leave, or you have major investment and you’re effectively kicking poor people out. I don’t know if American cities have a good strategy to address that problem.”

Schlichtman even fears that the affirmative fair housing rules could pave the way for gentrification, if they’re so enforced: a provision for “transforming racially and ethnically concentrated areas of poverty into areas of opportunity” could, Schlictmann writes, “be used to [legitimize] razing highly-central ’sinking ships’ where poor people reside on profitable real estate.”

To prevent that, he says, HUD would have to ensure that affordable housing would be proactively protected in areas projected to gentrify, or a familiar cycle could ensue.

“If it doesn’t, the AFFH’s encouraging of gentrification along with the encouraging of moving to opportunity areas will foster displacement from one neighborhood to another,” Schlichtman writes, “clearing out ‘areas of poverty’ of poor residents, and years later—after they become gentrified ‘areas of opportunity’—fitting them with some kind of inclusionary zoning.”

If that sounds implausible, consider how we got here. As Freemark argues, housing policy—at this point, at least—isn’t meant to intentionally foster segregation, but it does anyway. Federal money goes to help poor people with housing, who live in poor neighborhoods, which puts housing in poor neighborhoods, which concentrates poverty, and so on. The new HUD rules offer a lot of tools to address this, tools well-suited to the contemporary thinking about housing, poverty, and opportunity. But those tools will have to shape a lot more than just housing units. Development organizations, housing authorities, government funding streams, and HUD itself will all need updates and upgrades to make them work as intended.